August data shows Chinese economy's continued momentum

BEIJING - China's August economic data released Saturday gave relief to market participants, with the figures demonstrating the economy's continued momentum despite the government's tightening measures and moves to cool the property market.

Higher-than-expected growth in fixed asset investment, industrial production, retail sales and new loans, as well as the August trade data announced Friday, all pointed to the increasing strength of the Chinese economy.

Signs of re-acceleration


China's industrial value-added output growth accelerated to 13.9 percent year on year in August from July's 13.4 percent growth, the National Bureau of Statistics (NBS) data showed.

The rebound was the first increase in the speed of growth in industrial value-added output this year, after seven consecutive months of decreases in the rate of growth as the government introduced  curbs on bank lending to energy-intensive industries and the property market.

"It is a good result," the NBS spokesman Sheng Laiyun said, adding the August output data was a mild rebound from the 13.4 percent growth in July and 13.7 percent growth in June, suggesting China's industrial production stabilized from fast expansion in the first half.

Retail sales growth accelerated to 18.4 percent in August. Urban fixed asset investment also maintained a strong growth in the first eight months, up 24.8 percent from a year earlier.

Further, an unexpected acceleration in China's imports last month pointed to strong domestic demand. Exports grew 34.4 percent year on year in August, slowing from July's 38.1-percent surge, while imports rose 35.2 percent in August, sharply up from the 22.7-percent increase in July, customs data showed Friday.

Zhang Liqun, a researcher with the State Council's Development Research Center, said the investment, consumption and exports data were good and suggested that China's economic growth rates will not decline significantly.

New yuan-denominated lending picked up to 545.2 billion yuan (US$80.53 billion) in August compared with the 532.8 billion yuan in July, the People's Bank of China, or the central bank, said in a separate statement Saturday.

China's broad money supply (M2), which covers cash in circulation and all deposits, increased 19.2 percent year on year by the end of August, up 1.6 percentage points from the end of July.

The rebound of M2 from July indicated that China's economic slowdown was not as rapid as expected, said Liu Yuhui, economist with the Chinese Academy of Social Sciences.

"The overall economy is stable and sound. It is heading in the direction expected and as set by the government's macro-economic controls," Sheng said.

Earlier figures showed that China's GDP grew 11.1 percent year on year in the first half of the year. But its economic growth rate slowed to 10.3 percent in the second quarter, from 11.9 percent in the first three months the year.